Industry News

Wells Fargo tightening standards in distressed markets

GSEs, mortgage insurers have made similar moves
Published on Feb 29, 2008

Wells Fargo & Co. is tightening underwriting standards today in more than 200 markets it has identified as distressed or soft, increasing down-payment requirements and making stated-income loans off limits in some markets. The new guidelines require 5 percent loan-to-value (LTV) reductions on conforming loans in which the LTV exceeds 75 percent, and bar nonconforming loans with LTVs above 75 percent, according to the blog Blownmortgage.com, which obtained a copy of a Feb. 25 memo to brokers. BlownMortgage.com said the memo identified more than 30 California markets as at-risk. Reuters reported that the memo identified 33 at-risk markets in Florida, 15 each in Michigan and Virginia, and 13 each in Maryland and Ohio. Underwriting standards are also being tightened in markets in Arizona, Colorado, Connecticut, Washington, D.C., Illinois, Louisiana, Massachusetts, Minnesota, Missouri, Nevada, New Hampshire, New Jersey, New York, Oregon, Pennsylvania, Rhode Island, Wa...

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